HONG KONG'S business community is under threat from sophisticated fraud gangs who use cheques that bounce to cheat companies out of millions of dollars, a judge warned yesterday. Judge Jackson said the courts must take a serious view of the increasingly prevalent swindles, which erode business confidence. He made his comments at the District Court while jailing for three years and four months the front man for a gang which cheated 13 companies out of goods worth $2.1 million in just four days. So Muk-chi, 37, pleaded guilty to 13 charges of obtaining property by deception in July 1990. After the swindle, he fled to China with his family. He returned to Hong Kong late last year to visit his sick mother and gave himself up to police. Judge Jackson said it was easy in Hong Kong for fraudsters to open bank accounts and order large quantities of goods without having any intention of paying for them. 'The financial consequences for the companies involved are often dire,' he said. 'There may come a time when such companies will, understandably, refuse to supply goods against a cheque and will only do so in return for hard cash. 'The consequences of this will in turn be serious for the business community of Hong Kong when no potential customer will be trusted.' Luke McGuinniety, defending, said So was a 'fall guy' for other gang members who escaped arrest. He was paid $30,000 for signing all the cheques. 'He was ignorant and stupid rather than cunning, calculated and deceiving,' Mr McGuinniety added. Prosecutor A. R. Suffiad said So, a drug addict, was the signatory to two bank accounts in the name of a company called Yee Fung Group Enterprises. Post-dated cheques signed by him were used by other gang members to pay for electrical goods, shirts, and belts. After the property had been handed over the cheques were found to be worthless. When the police moved in on the operation they found that the company office at North Point and a warehouse at Nam Fung Industrial City had been totally cleared out. None of the goods has been recovered. The face value of bounced cheques which passed through the bank accounts was said to have been more than $5.8 million. But the charges to which So pleaded guilty involved $2,173,563. Police records show that 425 cases of deception were reported in Hong Kong in the first three months of this year. Acting head of the Commercial Crime Bureau, Dave Holloway, urged companies to take precautions to make sure they do not become victims of similar gangs. 'They should ask to see ID cards of the people to whom they are handing over the goods and make sure they know their final destination,' he said. Mr Holloway said the gangs targeted smaller businesses which often went bankrupt as a result of being cheated. This particular kind of deception leads to about 30 cases coming before the courts each year.
